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- June 9, 2014 -

Supply Chain News: Amid Sales Slump, New Walmart CEO says it Has to Go More Digital, will Push 3D Printing

McMillon Says Walmart Needs to Change Quickly, is Likely to Do More Acquisitions in US

by SCDigest Editorial Staff

New Walmart CEO Doug McMillon, who took over for Michael Duke earlier this year, told the audience at the Code Conference a couple of weeks ago that Walmart had to do a better job in the wide ranging digital world, and that one key to that is likely to be 3D printing capabilities in its stores and DCs.

SCDigest Says:

Walmart's CEO also had some compliments for fierce rival Amazon.com, noting that "Clearly, Amazon is teaching the world what's possible."

That news came as Walmart continues to struggle a bit in the sales area, especially in the US. In its recently ended Q1, sales at US stores open at least a year slipped 0.2 percent in the quarter, the fifth consecutive quarter of decline the metric, considered a key gauge of a retailer's financial performance.

Walmart US store traffic also fell 1.4% during the first quarter, building on a 1.8% decline from the year before.

Walmart primarily attributed the poor results to bad weather in much of the US during the quarter, mentioning "weather' some 18 times during the earnings call with analysts. That said, the company expects flat US results in the second quarter in now better weather.

Meanwhile, on stage at the Code Conference in Rancho Palos Verdes, CA, McMillon was asked about what he finds most interesting right now.

His response: "3D Printing is interesting to me. We have had some tests in this country and a couple of others, just bringing 3D printers into the store to show them to customers and create a mini-me, a statue of you, and we can't keep them in stock."

He believes that relatively soon, 3D printers will be used to create products for customers at Walmart retail stores around the world. He also thinks that such technology will eventually play a key role in speeding up shipments by producing products at the company's distribution centers.

One might infer from that thinking that simpler products would be produced in stores, using less expensive and sophisticated printers, and higher volume and/or more sophisticated items at the DC-level made with more capable machines.

It should be noted that Amazon has launched its own pilot program to sell 3-D printed objects on its website. The site offers such products as 3-D printed jewelry, toys, games and home décor.

Earlier this year, office products retail Staples announced a partnership with a company called 3D Systems to offer 3-D printing services in two Staples stores in New York City and Los Angeles.

McMillon also said Walmart is likely to do more acquisitions. In its history, Walmart has almost exclusively made acquisitions internationally to enter local markets, such as Asda in the UK or Massmart in South Africa.

But McMillon said "It's clear we need to change, and we need to change fast. We've been more acquisitive lately, especially for talent. Our pace of acquisitions, I think, is going to accelerate."

He later added that "it might make sense" to acquire a 3D printing company of some kind.

Walmart's CEO also had some compliments for fierce rival Amazon.com, noting that "Clearly, Amazon is teaching the world what's possible."

On home grocery delivery, McMillon said he is not certain exactly which geographies it will work, but that Walmart is focused currently on delivery in London and possibly Shanghai.

McMillon also said he plans for Walmart to be the leader is selling products to make the "connected home" possible.
He added that "We're seeing that 10% of our mobile orders are happening in a store."

To try to juice those results, Walmart is experimenting with "geo-fencing" that sends messages and coupons to customers' smart phone while they are in one of its stores.

Any reaction to the comments from Walmart's CEO? Do you see 3D printing being common at retailers any time soon? Let us know your thoughts at the Feedback section below.